Client has a rental property in Argentina. The economy has been bad for years and is worse now. She converts Argentine pesos to US dollars and had been valuing all her rental income and expenses at the official rate.
Inflation is rampant. The government just severely restricted the purchase of US dollars since everyone is attempting to convert to dollars to stabilize their savings or to get the money out of the country. Also, many vendors accept dollars for goods and services, rather than pesos.
As a result, there is a thriving black market for US dollars operating in the open and charging about 5%-10% more than the official rate, changing daily, but without the quantity restrictions. For all intents and purposes, this has become the daily exchange rate. Can this rate be used in valuing her rental expenses?
- posted 10 months ago